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Preopen Trading: Chase Manhattan, J.P. Morgan Down on Merger News

Stocks expected to pop at opening bell.

Once again, merger mania in the financial sector lit up premarket trading.




Chase Manhattan


was trading at $50.56, down $2.25 from Tuesday's closing price of $52.81, after it agreed to buy

J.P. Morgan

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

in a stock deal valued at $33.2 billion. J.P. Morgan was trading at $179, down $6.50 from yesterday's close of $185.50.

The new combination would give the new company,

J.P. Morgan Chase & Co.,

roughly $660 billion assets. According to the terms, Chase would pay 3.7 shares for each share of J.P. Morgan, or about $207 per J.P. Morgan share.

In tech action,

America Online


was slipping 31 cents to $55.50, down from Tuesday's finish of $56, according to


, on news that the Web giant could have to open its instant messaging service to competitors to receive federal regulatory approval for its planned merger with

Time Warner


, reported in

The Wall Street Journal


The semiconductor sector could get a boost from


(RMBS) - Get Rambus Inc. Report

today. The chipmaker was trading at $87.50 on Instinet, $10.69 higher than yesterday's close of $76.81, after Japanese chip giant

TheStreet Recommends

NEC Corp

said that it entered a new chip-licensing pact with Rambus.

'Tis the season for profit warnings, and today it looks like

Watson Pharmaceuticals


is taking heat for its earnings woes. The shares were trading at $53.25, down $10.88 from yesterday's close of $64.13 after the company said increased costs and a decline in product sales would leave third-quarter profits missing the 10-analyst estimate of 48 cents a share.

Stocks are set to see a pop at the opening bell. The

S&P 500 futures on


lately were up 2.80 to 1506.80, about 3 1/2 points above fair value as calculated by

Prudential Securities

. Fair value is a good gauge of how stocks will perform in the early going.


Nasdaq 100

futures were up 27 points to 3750.00, about 21 points above fair value, as calculated by

, and indicating that tech stocks are poised to open to the upside.

Europe's major indices were tentatively lower, with France's


off 1.1%, Germany's

Xetra Dax

down 1% and the U.K.'s

FTSE 100

0.5% lower. Japan's

Nikkei 225

gained 0.9% overnight, while Hong Kong's

Hang Seng

slipped 2.2% (see today's

Asian Markets Update for more).